Top 5 Stocks to Buy in 2022 According to Motley Fool’s 1623 Capital

3. FedEx Corporation (NYSE:FDX)

1623 Capital’s Stake Value: $11,570,000

Percentage of 1623 Capital’s 13F portfolio: 5.79%

Number of Hedge Fund Holders: 52

FedEx Corporation (NYSE:FDX) is an American multinational conglomerate that specializes in transportation, e-commerce, and related services. Motley Fool’s 1623 Capital boosted its FedEx Corporation (NYSE:FDX) by 39% in Q1 2022. The hedge fund owned 50,000 shares of the company, worth $11.5 million, representing 5.79% of the total portfolio. 

On July 1, Berenberg analyst William Howard downgraded FedEx Corporation (NYSE:FDX) to Hold from Buy and lowered the price target to $275 from $333. The stock has had “something of a reprieve in the past few weeks, after the company changed its CEO and the apparent influence of an activist investor prompted some strategy changes”, the analyst told investors. However, with short-term earnings risks increasing, the shares may “pause for breath until the macroeconomic outlook becomes clearer”, said the analyst.

According to the first quarter database of Insider Monkey, 52 hedge funds were long FedEx Corporation (NYSE:FDX), compared to 64 funds in the prior quarter. Mason Hawkins’ Southeastern Asset Management is a significant shareholder of the company, with 1.38 million shares worth $321.2 million. 

Here is what Artisan Value Fund has to say about FedEx Corporation (NYSE:FDX) in its Q3 2021 investor letter:

“Our weakest Q3 performers included FedEx. Shares of FedEx Corporation (NYSE:FDX), a global shipping and logistics firm, were held back by disappointing business results as labor cost headwinds and air network disruptions overshadowed solid top-line trends. We think the company should be able to overcome these near-term issues. Importantly, FedEx Corporation (NYSE:FDX) has strong pricing power as it operates in a consolidated global shipping industry. In September, the company announced it would increase its shipping rates by an average of 5.9% across most of its services, which is the first time in several years that its annual increase would exceed 5.0%. The industry’s renewed pricing discipline is a welcome change, reflecting a broader commitment to earn better returns on invested capital. FedEx Corporation (NYSE:FDX) is also closer to fully integrating TNT, a European-focused parcel company it acquired in 2016. The market is beginning to incorporate a higher probability FedEx will fully integrate TNT, which will provide a significant boost to profits. The stock now trades at a near-trough multiple of less than 12X 2022 earnings, so we added to our position on weakness.”